ROI Comparison Between SEO and PPC

There is a long-standing debate on which marketing strategy – SEO or PPC – yields a better return on investment (ROI). Both methods are effective in increasing brand visibility, generating leads, and improving revenue, but they have their unique differences.

Search engine optimization (SEO) helps you rank higher in search results and attract organic traffic to your website. On the other hand, pay-per-click (PPC) advertising allows you to rank your website above organic listings and target customers at the right place and time.

The question arises: which strategy should you prioritize – SEO, PPC, or both?In this article, I shared the benefits and risks of SEO and PPC. By the end of this piece, you’ll make a better decision on which is right for your business. 

But first,

What is ROI? 

ROI in marketing, or return on investment, is a key performance indicator that denotes how much profit your marketing spend generated. It is the ratio of the profit to the entire marketing cost: 

ROI helps to assess the effectiveness of marketing campaigns, channels, and strategies. It also enables you to allocate resources accordingly. Insights obtained from this analysis can be used to inform future campaigns. 

For instance, if you’re a new business owner looking to boost brand visibility and attract well-paying customers, social media marketing, search engine advertising, and search engine optimization might be your top focus. 

Once you start investing in these channels, monitor their performance to see which reaches and engages the most people. This information helps you make informed decisions for future campaigns to improve results.

Remember that marketing ROI is subjective and largely depends on your business objectives.

SEO vs. PPC

SEO stands for search engine optimization. It’s one of the significant types of search engine marketing (SEM) that focuses on optimizing your website to appear on the search results, rank high for relevant search queries, attract organic traffic, build credibility, and, ultimately, boost sales. 

SEO is a low-cost marketing channel compared to other forms of search engine advertising. It encompasses keyword research (on-page), link-building (off-page), and technical and local SEO. 

Usually, search engine bots crawl your web pages to evaluate the relevance and quality of your web content and match them accordingly to user search queries. 

Certain ‘ranking factors’ are used for this evaluation. Google, for instance, checkmarks content quality based on its E.E.A.T. content guidelines (Experience, Expertise, Authoritativeness and Trustworthiness). 

If your content satisfies all these, your page has a better opportunity to be listed at the top of the search results. And this translates to increased visibility, credibility, and click-through rate. The best part is you can attract more conversion-oriented traffic to your website at a lower cost, as the benefits of SEO can outweigh the costs. 

PPC is a type of performance marketing that focuses on advertising on search results. They can come in diverse formats, such as texts, images, videos, or a combination. Unlike SEO, you must pay a fee whenever users click on your ads. 

PPC ads appear on search engines like Google, YouTube, Quora, Pinterest, social media platforms, websites, apps, and more. They are usually listed above the organic search results: 

It’s considered one of the higher ROI channels for marketers and advertisers. For instance, if you pay $4 per click and it leads to a $500 purchase, you’ve generated a high ROI based on your spending. 

The benefits of SEO

Listed below are the advantages of using SEO for your business: 

Increased traffic: 

 Here are some interesting statistics: 

• 63% of online searches start with a search engine 
• 53.3% of all website traffic comes from organic search 
• SEO drives <1000% more traffic than organic social media egg 
• The top-ranking page gets 49% of all clicks

When your website is well-optimized and meets Google’s ranking criteria, your chances of appearing at the top of search results increase. This results in more visibility, clicks, and traffic to your site. 

The most exciting part about SEO is that you can target customers at every stage of their purchase journey. You can create guides and ebooks or publish informative blog posts that nurture them until they become paying customers. It’s neither sale-sy nor coercive, as it focuses on providing valuable, relevant, and engaging content that turns visitors into loyal customers. 

Organic Search Results: 

Search engine bots crawl web pages and rank them on the search results based on their relevance to user search queries. Websites that provide more valuable, informative, and customer-centric content will likely rank higher in search results than those without. 

Sometimes, factors such as domain authority and relevance come into play. Brands that have built substantial credibility over time rank higher on the organic search results over newer sites. 

That said, the more you optimize your site for search engines, the higher your chances of ranking high in the organic search results.  

For instance, if you’re a local pet store in Texas, you can optimize your website to attract foot traffic. 

This requires using local search keywords in your content, hyperlocal targeting to funnel local traffic with purchase intent, listing your products or services in relevant local directories, publishing high-quality, informative content, etc. 

Long-Term Results: 

Content marketing, link-building, social media management, and all other SEO-related tasks are a persistent, ongoing process of building a robust brand online — to increase the number of people funneled into your sales pipeline. These activities are not for short-term gain; they’re for long-term profits.

Once you optimize your site for SEO, you might not get results quickly. But through consistency and persistence in applying the right strategies, you’ll likely see improvements over time. 

Cost-Effective Solutions:

SEO isn’t cheap. There’s no such thing as ‘free’ traffic. 

Hiring an SEO agency or consultant, finding and hiring quality writers, marketing on social media, purchasing the right tools for your marketing stack, etc., comes at a high cost. And the bigger your brand, the higher the investment required. 

Read: SEO Pricing – What Does SEO Cost

However, the expenses are justifiable when considering the potential investment returns. Credibility and relevance, the results of sustained optimization, cannot be purchased and can only be built over time. 

So, while it may seem costly from the outset, the dividends come in the form of increased visibility, traffic, boosted brand credibility, and, ultimately, more conversions.

The Compound Effect of SEO on Online Visibility: 

SEO activities, when combined, can create a rippling effect in boosting your visibility online. This encompasses combining diverse optimization tactics such as keyword research, link building, PR and outreach, content creation, etc., to create a synergistic strategy that boosts your rankings on search results. 

The Benefits of PPC 

The advantages of running PPC ads for your business are: 

Faster Results: 

Unlike SEO, PPC generates instant results. 

You can buy PPC ads to funnel traffic to your website and convert the traffic to paying customers. You’re not subjected to the seismic algorithm changes either. This is vital for new brands seeking a competitive edge in their industries. 

For instance, if you’ve newly established your brand and are looking to get customers (fast), SEO might be too slow to generate the results you want. With PPC, you can bypass all the ranking factors and get listed above authoritative sites on the search results.  

PPC also performs better in terms of conversions because of its hyper-targeting methods. 

According to research: 

• 65% of all high-intent searches result in an ad click 
• PPC traffic converts 50% better than organic traffic 
• 46% of all clicks go to the top three PPC ads 

Source

Targeted Audience Reach:

When optimizing for SEO, you may attract low-quality traffic to your site. And while this may seem like a significant improvement, it moves nothing in the bottom line. Let me explain. 

For instance, let’s assume you sell male shoes, and you want to optimize your site for the short-tail keyword ‘men shoes.’ This search query has over 11 million total search volume: 

This term needs to be more generic and can attract a diverse audience, including those not necessarily ready to purchase.  

On the other hand, PPC offers impressive targeting options based on demographics, zip code, behavior, previous interaction with similar brands, interests, etc. This ensures that you reach a highly qualified audience at scale. 

For example, suppose you’re a new brand in the fashion niche for millennials and Gen Zs. In that case, you can tailor your ads to reach people within that age group who have previously interacted with fashion brands. This hyper-targeting feature provides an excellent opportunity to cast your net wide and reach new audiences who may be interested in your products or services. 

More straightforward to measure ROI: 

PPC ads provide a plethora of data and performance information that can be used to inform your overall marketing strategy. Advertising platforms like Google and Facebook provide detailed analytics, tracking, and reporting tools, enabling you to track the performance of your campaign in real time. 

You’ll see how users interact with your ads, discover low-hanging opportunities to leverage, track business metrics, etc., for each PPC ad. You can also easily tweak your ad campaigns based on these insights for better results. 

More Control Over Budgets:

With PPC, you can wield total control over your marketing spend. This enables you to focus on the strategies that yield positive ROI for your business. 

Most ad platforms allow you to allocate budgets based on campaigns or a daily basis. 

Once you start getting conversions, for instance, more sales, you can increase your ad spend accordingly. And if you’re considering other methods or need to take a break, you can always pause your campaigns. 

This flexibility makes it ideal for small and medium-sized business owners trying to test the waters to find a more profitable client acquisition channel. 

Disadvantages and Risks of SEO and PPC 

Now that we have explored the benefits, what are their associated risks? Let’s find out. 

Cons of SEO: 

Time and Patience: The Slow-Burn of SEO Results

This is the most dreaded risk associated with SEO. 

It’s a long-term investment requiring patience to get substantial results. It can take six months or up to a year to show meaningful progress. 

Achieving success in SEO isn’t an overnight process. Several factors come into play – search engine ranking factors, users’ ever-changing behavior, industry releases, competitor strategies, etc. 

You need to continually stay abreast of these changes and strategically refine your campaigns accordingly to get or retain your rankings on the coveted first page of the search results. This can be frustrating if you’re seeking rapid results.

Algorithm Changes and Their Impact on SEO Efforts

Imagine you have just optimized your website for search engines and are currently ranking well for your primary keyword. Suddenly, your website’s ranking drops due to a new algorithm update. This means you have to re-evaluate your SEO strategy and make changes to it to accommodate the new updates. This can be frustrating, especially if you’re not well-versed in SEO.

Difficulty in Attribution of Sales to SEO

As I shared earlier, SEO involves myriad factors that may make it difficult to determine the precise strategy impacting the bottom line. 

The customer purchase journey is usually not linear, as they interact with multiple touch points before converting. 

This can be reading a blog post, clicking a call-to-action from email newsletters, seeing a recommendation from a colleague, reading a social media post, etc. All these make it difficult to attribute revenue or sales to SEO because customers could’ve stumbled on the company anywhere once they decided to buy.

Risks associated with PPC Advertising 

Cost Intensity and Bid Wars 

While PPC advertising can be a cost-effective strategy to drive leads to your site, it can also be costly, depending on the keyword you’re targeting. 

Short-tail keywords with high search volume are usually competitive, and this competition can increase the cost-per-click of the keywords, making it difficult for small businesses with minimal budgets to bid for these keywords. 

For instance, if you own an e-commerce marketing agency and choose to bid for this keyword, it costs $15.43 per click: 

If 100 people click on your ads without converting, that’s over $1500 down the drain. This isn’t sustainable if you don’t have a solid strategy to maximize each click and turn them into meaningful conversions. 

Plus, most PPC platforms have a steep learning curve, and you need to learn how to: 

• Set up ad campaigns
• Target the right audience and audience
• Allocate budget effectively 
• Effectively manage your bid to optimize your budget 
• Conduct A/B tests to identify the most effective one that’ll drive maximum conversions 

Though there’s no minimum or maximum amount you can spend listing your ads, your ad placement, frequency, and overall visibility depend on your investment. 

This means the more money you’re willing to spend, the greater your visibility and conversions. If your budget is too low, you may not get any results from your campaigns. 

The Temporary Nature of PPC Visibility 

Since PPC depends on your ad spend, the visibility and clicks end once your investment is exhausted. This makes it an unreliable marketing strategy, especially when aiming for long-term gains. 

Lastly…

Click Fraud and Its Impact on PPC Campaigns

Click fraud is when someone or an automated bot intentionally clicks on your ad with no intention of buying but to deplete your ad budget. According to research, ad fraud will cost digital marketers $84 billion this year and is projected to reach $170 billion in 2028. 

Source

Sometimes, click fraud can be orchestrated by an envious competitor trying to knock you out of the paid search results to increase their visibility and traffic instead. 

Why should you care? 

Well, click fraud leads to high advertising costs (since you’re spending more as your CTR increases), low conversion, and skewed user data. 

The worst part is that while most ad platforms give you a holistic view of your campaign effectiveness, they must differentiate between original and fake traffic. 

Wrapping it up…

The best way to go is to combine both.  

PPC can offer great insights into your target audience and help you know which message/channel they prefer the most. 

You can leverage these insights to inform your SEO strategy to attract the right audience organically, build credibility,  and position your brand to reap long-term SEO gains. 

This means experimenting with PPC on social media and search engines. If more people converted from social media, you’d have to intensify your content distribution strategy so blog content can reach more readers on those channels. 

If more people convert from PPC ads on search engines, intensify efforts to optimize your content further to dominate search engine results. 

According to Google:

Plus, combining both gives you more internet real estate and visibility on the search results. Customers are also more likely to click on your ad when familiar with your brand. 

You can also take the guesswork out of your marketing by partnering with us today! Our team at HigherVisibility comprises SEO and PPC ads specialists ready to supercharge your website visibility and drive paying traffic to your site. We adopt a hyper-laser targeting strategy to funnel traffic with buyer intent. Reach out to one of our experts now for a custom strategy.